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Shares of Balkrishna Industries rallied over 5 per cent in Tuesday’s trade after the company on Monday posted 50.35 per cent year-on-year (YoY) rise in profit at Rs 230.25 crore for the quarter ended June 2018. It had posted a net profit of Rs 153.14 crore in the corresponding quarter last year.

Total income of the tyre maker jumped to Rs 1,444.62 crore in Q1FY19 over Rs 1,104.26 crore in the same quarter last year.

The board also declared an interim dividend of Rs 2 per equity share of Rs 2 each. The cash outgo on account of interim dividend and tax will be Rs 46.61 crore.

Brokerage firm Edelweiss Securities maintained ‘Buy’ on Balkrishna Industries with a revised target price of Rs 1,471 (from Rs 1,313 earlier). “BKT is well poised to capitalise on its cost leadership and surplus capacity, and an uptick in the global industry. We estimate a 32 per cent PAT CAGR over FY18–20.” Edelweiss said in a report.

Management has revised up its FY19 volume guidance to 225,000-230,000 MT (around 13-15% YoY growth vs 10 per cent earlier). “There are strong tailwinds in the form of surplus capacity (around 70 per cent utilisation) that can cater to demand coming from the OTR cyclical uptick. Besides, carbon black plant capacity expansion provides a margin lever, according to Edelweiss Securities.

The scrip was trading 5.83 per cent up at Rs 1,299 in the afternoon trade.